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Customer Development Process: The customer development process starts out qualitatively, with founders finding potential users in their social circle, but quickly becomes more quantitative as the product finds some initial traction. Automizers should spend a lot of energy developing great analytics for their product and marketing campaigns, because it can greatly enhance their understanding of whats working. Speed in decision making is crucial for Automizers. Customer Acquisition Strategy: There should be little focus on customer acquisition until product market fit. After product market fit Automizers should focus on searching for profitable customer acquisition channels and then drive as much growth as possible through the channel. Since product/market fit for Automizers connotes a great product, referral through word of mouth and viral growth is often a strong option. Product Validation: Validation does not always come through a direct exchange of money between the startup and user. In the early phases the currency of time and attention are more important. Automizers should heavily consider making their product free before product market fit, because the additional data points obtained through minimized sign up friction are usually well worth it as Automizers primary objective should be minimizing time to product market fit. The early revenue is inconsequential compared to the monetization potential that comes from stepping on the gas pedal once product market fit is achieved. That should be very doable for Automizers that have raised money though is a riskier decision for entrepreneurs who have decided to bootstrap. Investment: The discrete stages and low burn rates of Type 1 startups allow them to survive on small seeds rounds in the early phase of the startup with little dilution. Of all the types of startups Automizers need the least amount of capital,
(excluding some of its sub-types such as e-commerce).

When To Scale: Once they've reached product market fit and prove they have a viable business model they often require large amounts of capital to scale the company and outgrow competition. Common Pitfalls: Even though type 1 startups are the easiest to validate with data, technology driven teams often ignore whether there is actual market demand for the product theyre building. To compensate for lack of traction

they add more and more features, which only moves them farther away from building something people want. On the other hand Automizers without a strong technology team are in danger of building shallow product that can be easily copied. They try to bolster their user acquisition by creating additional buzz. The press logos may look great on the web site but the traffic wont convert to active users. Developmental Stages: The developmental stages outline the key milestones that startups move through. Our initial data and observations show that how fast startups move through these stages is a good indicator of their success. However, startups that jump over stages typically suffer a slow death or a confined to becoming a small business with limited growth. 1. Discovery This is the first stage of the startup. Many startups either spend too much time in this stage writing lengthy business plans and too little time getting feedback on their vision and testing their product with customers. If you work full time you typically need about 2 weeks to 2 months to move through Discovery, excluding pivots. Including pivots startups need on average about 5-7 months to complete the Discovery stage. Pivots occur when a startup decides to make a significant change to their vision or business model. When a pivot occurs a startup effectively loops back to the beginning of customer discovery and starts again. On average, a startup will pivot 3-4 times before exiting customer discovery. If a startup is still in customer discovery and its been more than 2-3 months since a pivot occurred they are probably moving too slow. To increase their speed of learning they need to get more feedback by getting out of the building and talking with prospective customers. Customer Development Goals: a) Outline product idea b) State Hypotheses about core areas of the business (using the business model canvas for example) c) Find Problem/Solution Fit using structured qualitative customer feedback d) Gain substantial insights about the players in your market and how it operates. What to validate: - Validate customer segments & personas - Validate minimum feature set with surveys, landing page conversion rates or paying customers. - Validate the user experience with early adopters using mockups Time Spent in Stage: 5-7 months

Optimal Team Size: 2-3 people Team composition: At this stage you set the core DNA of the company. The founding teams of successful Automizer startups generally have a strong focus on technology and design. Typical Financials: Capital Raised: 25k -100k (Early seed round) Burn Rate: 5-25k/Month (Mostly living costs for team members) 2. Validation The key milestone after building the MVP is finding a few users who are passionate about your product, see it's potential, and can help steer the direction of product development. However, you should investigate whether these initial passionate users represent an early adopter segment for a large market and confirm that their needs aren't so specific that they would box you into a developing for a niche. Once you've validated this, through both qualitative and quantitative testing, the next major developmental milestone is product/market fit. Most startups never make it that far. This is where most pivots are likely to occur and you must be flexible, and open to the feedback you receive while testing your vision against reality. Getting to product market fit requires obsession with building a killer product, yet going heads down and cranking out feature after feature won't get you there. Automizers must focus on perfecting just the few features that are most important. Simplicity and usability win. Time in this stage: 3-5 months Customer Development Goals: a) Must Have Status with 3 Users b) Product Market Fit Team: Team Size: 2-10 People Financials: Capital Raised: 100k-1.5M Burn Rate: 25k -100k / Month 3. Efficiency If you reach product market fit, congratulations. It's almost time to attempt to scale to millions of users, but first the focus needs to be on getting efficient so that you're not pouring water into a leaky bucket. Efficiency comes from creating messaging that resonates with why users love your product, streamlining your conversion funnel, and finding profitable customer acquisition channels that support high volume. Once this is completed the next stage is to step on the gas pedal and get big, fast. But be sure to maintain balance between learning and execution.

Product/Market fit is a dynamic point, and if you don't continue to delight your users they will find someone else who can. Customer Development Goals: a) Refined Promise of Why Users Love Your Product b) Improve Conversion Efficiency & Avg Revenue per User c) Find Repeatable/Scalable Customer Acquisition Channels d) Saturate Customer Acquisition Channels Team: Team Size: 8-40 People Financials: Capital Raised: (No additional capital is typically raised in the Efficiency Stage) Burn Rate: 25k -100k / Month Time in this stage: 5-6 months 4. Scale Time in this stage: 7-9 months Financials: Capital Raised: 1.5M-7M Burn Rate: 100k-750k /Month

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